Wockhardt's earnings devastated by FDA bans

With FDA bans in place on two plants, India's Wockhardt saw its profits slip in the first part of this year. But with access to its largest market still severely curtailed, Wockhardt has been unable to get its financial footing and profits went crashing in its last quarter, off 94%.

Wockhardt reported Tuesday that its April-June net profit was 199.5 million rupees ($3.26 million), compared with 3.23 billion rupees ($52.9 million) a year earlier, Reuters reported. Net sales fell 27% to 9.91 billion rupees ($162 million) and were off 60% in the U.S., the company said in its earnings report.

The drugmaker had two of its manufacturing plants in India banned last year from exporting to the U.S. after inspectors found that it had been manipulating its testing data and passing for sale drugs that were not up to specs. The agency has since followed up with an intensive review of Wockhardt's Morton Grove plant near Chicago, which was helping the drugmaker prop up its U.S. sales, citing it for many of the same kinds of problems.

Wockhardt also ran into issues last year with regulators in the U.K., and those problems appear to be lingering in its financials with sales there remaining flat for the year, the drugmaker said.

Wockhardt, of course, is not alone. The FDA last year and this year banned two more Ranbaxy Laboratories plants in India after inspectors found rampant problems. The drugmaker's other two Indian plants that had sold into the U.S. were put on import alerts in 2008. Those ongoing problems at Ranbaxy led Japan's Daiichi Sankyo, which owns controlling interest in Ranbaxy, to agree to sell it to India's Sun Pharmaceutical for $3.2 billion. Since the the deal was struck, Sun also has had a plant banned by the FDA.

- read the Reuters story
- here's the earnings announcement (PDF)